Tax Bill Allows for a Two Year Moratorium on Asking for a Local Option Sales Tax

(KNSI) — After Minnesota lawmakers gave the okay to 36 cities and counties to go to voters for a local option sales tax, the Legislature put a two-year moratorium on future requests.

The moratorium was implemented during conference committee negotiations over the omnibus tax bill between the House and Senate. It was passed without any hearings or input from the public. More than $2 billion in sales tax bills – including some in central Minnesota – flew through both chambers with bipartisan support. But Representative Aisha Gomez, a Democrat from Minneapolis, wouldn’t hear of it. She chaired the House Taxes Committee and refused to give any local sales tax proposals a hearing, leading to the compromise.

Gomez says it’s an equity issue that hurts lower income residents and allows cities or counties with larger tax bases to get money more easily.

Representative Dan Wolgamott told KNSI News that he understands Gomez’s point. “There are concerns that people from other areas who don’t have the ability to vote for or against an increase in the sales tax wind up having to pay it. And we’ve they have concerns that this is something that is getting overused.”

He agrees the policy is worth looking at and studying, but he wasn’t happy about the two-year ban. “I think that if our local governments want to be able to go to their voters and ask their voters, are you willing to chip in a little more to take care of this project? If voters want to do that, they should be able to decide.”

Senator Aric Putnam proposed a bill to let communities have control over going for local option sales taxes.

Wolgamott was the only Democrat to vote with Republicans on a motion to send the final tax agreement back to the conference committee, but it failed. Ultimately, Wolgamott supported the tax bill because of its other benefits.

In the end, as part of the moratorium negotiations, Stearns County, St. Joseph and Waite Park did get approval to ask for a local sales tax from its voters. Stearns County wants a 0.375% tax for a new jail and justice center. St. Joseph wants to pass a 0.5% sales tax for a new community center/YMCA and park improvements. Waite Park is asking for a 0.5% sales tax for a public safety building and park and street projects.

___